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LANSING — State retailers are predicting slow sales for the first quarter following a gain from the last 90-day period. But for some of them, their health insurance needs may be filled at a faster pace.

The Michigan Retailers Association (MRA) announced last week that it has set up a new health plan with the Michigan Farm Bureau for sole proprietors, a program that will be open to MRA members starting March 1.

Linking with Farm Bureau's established, successful program will give many small-business owners a substantial price break. They'll also have more coverage options to choose from, said James P. Hallan, MRA president and COO.

Blue Cross Blue Shield of Michigan will administer the new plan, which promises to save members up to 40 percent on premiums. Charges will be based on the applicant's health history, age and region in which their business is located. Those likely to cut their insurance costs the most will be young members, along with those living in the Upper Peninsula and southeast Michigan where Blue Cross rates are the highest.

A big part of our membership is sole proprietors and they have seen the largest increases in health-care costs. Everybody has seen big ones, but sole proprietors have seen even larger increases than the others, said Tom Scott, MRA vice president of communications and public affairs. And we've been looking for some relief for them for quite some time.

Businesses with only one individual or family participating are eligible for the program, but they must apply for acceptance. A medical history and a physician's statement have to be included with the application.

Tom Nugent, Farm Bureau manager of member services, said 95 percent of applicants will be accepted and about 80 percent will receive the preferred rate. The remaining 15 percent will pay a higher standard” rate due to more serious or chronic health conditions.

It's not a silver bullet. It's not going to solve all their problems. But it should provide some substantial relief for sole proprietors who are younger and healthier, said Scott.

Sole proprietors already participating in an MRA Blue Cross plan do not have to switch to the new one. The MRA has 5,500 members who operate more than 12,000 stores. Those wanting more information should call the MRA at (800) 366-3699.

In the meantime, only 37 percent of retailers expect their first-quarter sales to top last year's. Another 29 percent reported that their sales would likely drop when compared to the first quarter of 2001, while 34 percent said receipts would be about the same as last year.

That projection from the Michigan Retail Index, which is compiled monthly by the MRA and the Federal Reserve Bank of Chicago, follows the holiday season where sellers had a 3.3 percent sales gain — or about half the 6 percent increase they had hoped for. Still, 45 percent of retailers did post gains, while only 25 percent did that the previous year.

In Christmas 2000, many retailers were caught by surprise when the robust sales of the previous few years didn't materialize. This year, their expectations were lower and many of them feel good about a small increase over the previous year, said Larry Meyer, chairman and CEO of the MRA.

The association said that furniture, appliance and gift shops had the best holiday sales, while apparel stores had the worst. Retail in Michigan is worth nearly $100 billion annually.

Some retailers lowered their inventory levels over the last half of last year for the first quarter of this year. Barb Stein, owner of the Great Northern Trading Co. in Rockford, told the MRA that she reduced her inventory throughout much of last year because of soft sales at her gift shop. Then stronger holiday sales left her with less merchandise to mark down.

We got rid of everything at regular price, said Stein, also an MRA board member.

State retailers seemingly have an optimistic outlook regarding the economy as they are looking for it to rebound at least by this summer and, perhaps, by as early as next month.

Retailers are always optimistic, said Scott. You have to be optimistic if you're going to open the door everyday.

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